Increasing intl. tourism is key to improving German economy

Bonn, Germany -- The future of Germany seems to be shrouded in uncertainty, causing consumers to be cautious in their disposable spending according to Christian Ehlers, executive director of Dehoga, the German Restaurant Hotel and Catering Association.

The German economy in 1997 has been generally sluggish, Ehlers continued, with industry revenues lagging approximately 4 percent behind those of 1996.

Since tourism generates strong results for the German hotel and restaurant industries, Dehoga -- which is Germany's counterpart of the National Restaurant Association -- has joined forces with a consortium of associations to develop more international tourism in Germany. The German government, under its current leadership of Chancellor Helmut Kohl, has made an active commitment to develop German tourism as a priority initiative, and a major marketing program is under development.

Germany today has approximately 250,000 foodservice outlets, about 20 percent of which are multiunit operations and the remaining 80 percent independent or small, emerging growth companies. The chain market continues to grow with quick-service operations moving into the forefront. McDonald's and Pizza Hut are leaders in multiunit restaurant expansion in Germany.

The hotel dining segment remains strong, with tourism accounting for a considerable percentage of its sales. Quick-service operations and catering -- or on-site operations that cater to exhibition centers -- also did well in 1997. There are large catering companies such as Bernhard Hoffmann GMBH & Co., that run the major exhibition and convention halls in Europe. Aramark catering basis, while other American companies provide in-flight foodservice at the Frankfurt Airport. Fine-dining and family categories, however, were slow.

While the German consumer is highly value conscious, about 90 percent of tourism is a result of Germans traveling within the borders of their own country, Ehlers explained. August is the big holiday month in Germany, and all restaurant activities are strong.

Special events sponsored by cities and regions draw huge German crowds which also have a positive impact on foodservice. Trade shows tend to be a big draw, benefiting the corresponding foodservice at the shows and the local community as well.

Following the demolition of the Berlin Wall in 1989, the subsequent unification of Germany has posed some interesting developments in the restaurant industry in the nation. The former East German Communist government controlled all of the restaurants, and the restaurant business was not a priority under this highly controlled environment. As a result, the industry was a wasteland of poor operations food and service and limited choices.

Since then restaurants have developed slowly in the former East Germany, and most of the new restaurant activity has taken place in the major cities, such as Leipzig and East Berlin, where new restaurants are opening almost every day. Much of that new restaurant growth has been developed by professional and successful West German restaurant companies as well as major chains.

Berlin is clearly the center of urban growth in the country as the German government shifts its seat from Bonn over the next year or two. Dehoga also will be moving its trade association offices to Berlin in 1999, Ehlers said.

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